SoftBank sells its entire Nvidia stake for $7.6 billion, stirring fresh AI bubble fears

NEW YORK - SoftBank Group’s sale of its entire US$5.8 billion (S$7.6 billion) stake in artificial intelligence (AI) chip giant Nvidia jolted stock markets on Nov 11, stoking fears that the frenzy around AI may have peaked, especially after recent warnings from Wall Street bank chiefs and a famed short seller.

In its quarterly results, the Japanese tech investor said it had sold all the 32.1 million Nvidia shares it held in October to bankroll chief executive officer

Masayoshi Son’s sweeping AI push

, built around his “all-in” bet on ChatGPT creator OpenAI.

SoftBank needs the proceeds for initiatives including the US$500 billion Stargate project to expand US data-centre capacity and as much as US$40 billion in funding pledged to OpenAI, whose financing details were not given with the announcements.

“I can’t say if we’re in an AI bubble or not,” chief financial officer Yoshimitsu Goto said during an earnings conference on Nov 11. SoftBank sold Nvidia “so that the capital can be utilised for our financing”, he added, without elaborating.

The timing of its sale deepened some investor doubts that valuations in the AI industry might have gone ahead of fundamentals.

Shares of SoftBank plunged as much as 10 per cent in morning Tokyo trading on Nov 12. Nvidia’s shares slid 3 per cent in US trading on Nov 11, after climbing 48 per cent in 2025, including Nov 10’s close. 

Adding to the jitters was a revenue forecast cut from AI cloud provider CoreWeave over a contract delay that sent its stock down 9 per cent.

Drumbeats of an AI bubble grew louder in recent weeks after Morgan Stanley and Goldman Sachs CEOs warned that equities could be heading to a drawdown, while hedge fund manager Michael Burry, known for shorts on the US housing market ahead of the 2008 crash, bet against Nvidia and Palantir.

Several analysts said the sale suggested Mr Son – one of tech’s most audacious investors – sees the blistering rally that turned Nvidia into the first US$5 trillion company in October cooling after a more than 1,200 per cent surge in the past three years.

But a few of them pointed to SoftBank’s patchy record managing its Nvidia holdings. The company, by some estimates, missed out on a more than US$100 billion rally in Nvidia shares by selling it off in 2019 before the AI boom took off, only to later buy the chipmaker’s shares again.

Mr C.J. Muse, senior managing director at Cantor Fitzgerald, said: “As for timing, cannot say Masayoshi Son has been great with his trading of Nvidia shares. It appears simply resource allocation – finding funds to make bets elsewhere.”

OpenAI focus, Son’s growing war chest

Along with the Nvidia share sale, SoftBank sold around US$9.2 billion worth of shares in T-Mobile, providing Mr Son with a larger money chest to stamp his influence on an industry hungry for the capital and chips needed to fund the pursuit of AI technology that can match or surpass human intelligence.

Mr Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors, said: “By cashing in now, he’s securing the capital needed to double down on his conviction in AI applications and the super-scaled infrastructure behind them, OpenAI, Oracle and the Stargate project.”

But the rising bet on OpenAI also ties SoftBank, which has taken massive losses on its Vision Fund investments, closer to the start-up at the centre of a series of circular deals that have fuelled worries about the bubble.

The Japanese company’s stock, which has surged more than twofold in 2025, is getting priced more and more based on its exposure to OpenAI. The stock jumped in October on news of a sweeping OpenAI restructuring that frees the start-up from its non-profit roots.

OpenAI is considering a US$1 trillion public listing as soon as 2026, which could be a big windfall for investors such as Microsoft and SoftBank, Reuters has reported.

The rising valuation of OpenAI also boosted SoftBank’s second-quarter net profit, which more than doubled. The Japanese company reported a surprise net income of 2.5 trillion yen (S$21 billion) in its fiscal second quarter, far outrunning the average of analyst estimates of 418.2 billion yen. OpenAI’s value has risen US$14.6 billion since SoftBank invested, Mr Goto said.

But OpenAI has not given any clear details on how it plans to fund its AI infrastructure deals that total around US$1.4 trillion.

It expects to finish the year with US$20 billion in annual recurring revenue and recently walked back comments on the need for government-backed loans.

“The Vision Fund’s chequered past certainly lends an air of high-stakes poker to this divestment,” Mr Schulman said. REUTERS, BLOOMBERG